I agree. Apple has established a design platform for launching new commercial devices, from less expensive iPhone models down the road to less expensive video-enabled iPods by this summer, all with larger touch-screen displays and gesture recognition.
Also, I don't see that it would be impossible to still use the iPhone with one hand, and your thumb to press the interactive touch-screen.
I am concerned about the lack of third-party applications for the iPhone -- but I don't think this situation will last long. This is a platform in infancy, waiting to be exploited in the next decade.
Tony Bove
(Author, "iPod and iTunes for Dummies")
(See my blog at: http://www.tonybove.com/blog/)
Has the iPhone Killed the Video iPod?